* Fed verdict seen as crucial for sentiment
* Chinese monetary policies worry; Toyota recall weighs
* Reuters poll shows fresh gains expected in 2010
(Recasts, updates prices, adds comment/detail)
By Michael Taylor
LONDON, Jan 27 (Reuters) - Gold eased slightly on Wednesday
as the dollar edged up against the euro ahead of a U.S. interest
rate decision, while concern about China's restrictions on
lending kept investors away from riskier assets.
A Reuters poll of 60 analysts, traders and fund managers
showed a positive attitude towards gold for this year as a
whole, however, with prices seen averaging $1,150.50 an ounce,
according to the median forecast. []
Gold <XAU=> was bid at $1,094.95 an ounce by 1315 GMT,
against $1,097.25 an ounce in New York late on Tuesday. Last
week, gold touched a one-month low at $1,081.90.
U.S. gold futures for February delivery <GCG0> were at
$1,094.90 per ounce, down 0.3 percent.
"The problem for commodity traders at the moment is the
broad-based correction in pro-growth assets and the dollar going
up," said Jesper Dannesboe, senior commodity strategist at
Societe Generale. "Those looking to buy, and there are quite a
few out there, are just trying to time it."
"One driver that triggered people to take profit is the
Chinese tightening ... the market was overbought anyway," he
added. "The big question everyone is asking, is if this is a big
buying opportunity or a bigger move lower."
Gold tends to hold less appeal for investors in times of
rising interest rates as it does not bear interest itself.
China's credit-tightening steps and President Barack Obama's
plans to limit banks' risk taking have dampened confidence over
an economic recovery in recent weeks, helping investors shift
back to the dollar from riskier assets, including commodities.
Obama's State of the Union speech is due later on Wednesday.
[]
The Fed also ends a two-day meeting on Wednesday, which is
expected to yield little in terms of a policy shift, but comes
as the market waits to see if Chairman Ben Bernanke will be
confirmed in the post for a second term. []
FOMC CRUCIAL
Policymakers are expected to keep interest rates near zero
and indicate whether they will stick to plans to wind down an
emergency asset purchase programme by March. []
"The market has been building a base for the next move and
we expect things to get more exciting," said Andrey Kryuchenkov,
an analyst at VTB Capital. "Volatility will pick up, while later
today all focus will be on the Fed statement."
Palladium prices fell more than 1 percent, sliding further
from last week's 19-month highs of $471.75 per ounce when
investment demand fuelled by the recent launch of
exchange-traded funds in the United States boosted prices.
Palladium is expected to outperform other precious metals
this year, the Reuters poll showed. []
Palladium <XPD=> was at $416.50 an ounce, versus $425 late
in New York on Tuesday. Spot platinum <XPT=> was bid at
$1,517.50 per ounce, against $1,532.50.
Also weighing on sentiment was news that Toyota Motor Corp
<7203.T>, the world's biggest automaker, is to suspend U.S.
sales of eight models due to a safety recall. []
Platinum and palladium are exposed to the auto sector, as
they are chiefly used by carmakers as a component in catalytic
converters. "If you are looking for excuses to sell short term,
this is another one," said Citigroup analyst David Thurtell.
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD>, said its holdings stood at 1,111.922 tonnes as
of Jan. 26, unchanged since Jan. 19. []
Among other precious metals, silver <XAG=> prices were at
$16.68 an ounce versus $16.72 an ounce late on Tuesday.
(Additional reporting by Risa Maeda in Tokyo; editing by Amanda
Cooper)
